Self-Employed and rapidly losing hope of getting a mortgage

brownbagsFTB

I've been following these threads for a couple of weeks now, trying to get some reassurance that my Nationwide mortgage would go through. I got a decision in principle in September, viewed about thirty houses until I found 'the one' and eventually had my offer accepted (after going £20K over asking in a bidding war). My broker put the full application into Nationwide on the 18th November, the valuation happened on the 27th and was immediately approved. Since then I'd heard nothing until today when I had the news that my mortgage has been declined due to 'volatile income'. I had two years' of accounts to prove my income but the first year only showed 6 months of trading as I was PAYE for the first 6 months of the year. The 2nd year of accounts obviously showed big growth as it covered a whole year (all clear to see on my SA032). My broker has started a new application with a different lender which means going through the whole process again. I'm a sole applicant with 85% LTV, my credit rating is excellent and my income was good in the last tax year (and this one so far). Has anyone had luck getting a mortgage when self-employed? What hurdles did you have to leap over to get one? I trust my broker and I know he'll do his best but I'm losing the will. The system is stacked against us. Any reassurance/hand-holding gratefully accepted! 

Thrugelmir

With only 6 months of trading in year one, that is not a years trading. Your broker tripped up there.   

K_S

brownbagsFTB said:

I've been following these threads for a couple of weeks now, trying to get some reassurance that my Nationwide mortgage would go through. I got a decision in principle in September, viewed about thirty houses until I found 'the one' and eventually had my offer accepted (after going £20K over asking in a bidding war). My broker put the full application into Nationwide on the 18th November, the valuation happened on the 27th and was immediately approved. Since then I'd heard nothing until today when I had the news that my mortgage has been declined due to 'volatile income'. I had two years' of accounts to prove my income but the first year only showed 6 months of trading as I was PAYE for the first 6 months of the year. The 2nd year of accounts obviously showed big growth as it covered a whole year (all clear to see on my SA032). My broker has started a new application with a different lender which means going through the whole process again. I'm a sole applicant with 85% LTV, my credit rating is excellent and my income was good in the last tax year (and this one so far). Has anyone had luck getting a mortgage when self-employed? What hurdles did you have to leap over to get one? I trust my broker and I know he'll do his best but I'm losing the will. The system is stacked against us. Any reassurance/hand-holding gratefully accepted! 

@brownbagsFTB I'm sorry to hear about the decline. I'm not trying to second guess your broker here and he has all the information but based on the limited info in your post, especially one year's accounts only having 6 months of trading, Nationwide would be unlikely to be my first port of call. Additionally, for FTB SE cases at 85%+ LTV, Nationwide often underwrite in more detail. Was your DIP referred by any chance?

FWIW, my SE client apps definitely take a much longer time to get through since Covid, but they've all eventually worked out. So keep the faith!

Good luck with the next application, do you know who the lender is?

brownbagsFTB

@K_S Thanks! This is what I needed to hear, I'm so anxious over it all. Yes the original DIP went to referral but was then approved which gave me a false sense of security. The new lender is Accord. Apparently they're self-employed friendly?! I'm just so nervous of the sellers putting the house back on the market. They're in no rush to move as they haven't found anywhere to move to yet but I have to ring the EA tomorrow and give them the heads up that a 2nd valuation will be happening next week 

ACG

I think your broker made a mistake going to nationwide. As has been said, 6 months trading is not a year. Nationwide can be quite fussy and I do not think they were ever going to accept this.

There should be options, but they may not be nationwide rates. 

brownbagsFTB

@ACG to be fair to the broker, we went with nationwide when I wanted a 90% LTV, it was only when I ended up paying more than I’d projected for the house that I realised I would need to contribute a higher deposit. He has been helpful through the whole process and does know his stuff.  I’m not bothered about a higher interest rate at this stage, as long as it gets me on the property ladder and I can switch it out for a better deal in 2 years once I’ve got more accounts behind me

K_S

brownbagsFTB said:

@K_S Thanks! This is what I needed to hear, I'm so anxious over it all. Yes the original DIP went to referral but was then approved which gave me a false sense of security. The new lender is Accord. Apparently they're self-employed friendly?! I'm just so nervous of the sellers putting the house back on the market. They're in no rush to move as they haven't found anywhere to move to yet but I have to ring the EA tomorrow and give them the heads up that a 2nd valuation will be happening next week 

@brownbagsFTB Accord should definitely be better than Nationwide for this case as they typically exhibit more flexibility and common sense than the big banks, but it'll probably again boil down to how the underwriter views the first year's accounts. Out of professional interest, do keep the thread updated if you can. All the best!

Beeboo23

Similar situation as you and had a mortgage approved. You’ll get one from somewhere. 

brownbagsFTB

@K_S will do! And thanks for the reassurance! 😊

brownbagsFTB

@Beeboo23 that’s good to know. Congrats! 

Wilson777

@brownbagsFTB any updates? We are in same situation as you!  Got declined by Halifax but with no reason! Thinking of using a broker and apply with accord